Our backtests have shown that the Price/Book ratio is one of the most powerful indicators for value stocks on the JSE. Therefore we will be tracking the performance of live model portfolios constituted each quarter.

Here is an update of the portfolio made up of the lowest 10 price/book shares taken from the ALL-STOCKS JSE universe and constituted on 2 March 2009. Each share made up R5,000 at the creation of the portfolio, and brokerage charges were included. We see the portfolio is more or less tracking the ALSI on an absolute return basis, which is very good, since steep-value portfolios normally take time to yield fruit.

Here is the makeup of the portfolio. As expected, the standard deviation is high as the portfolio is still young (6 weeks old). Still, R6,241 profit for 6 weeks work is not bad at all...